States get share of new power

Tentative allocation of 16,000 Mw from 4 ultra mega projects made.

Tentative allocations of power from the five ultra mega power projects have been drawn up. Out of the total demand of 27,400 mega watt (Mw) made by 13 states, the power ministry has firmed up allocation for 16,000 Mw. This does not include allocation from the Akaltara ultra mega power project in Chhattisgarh.

The power ministry has also firmed up the payment security mechanism for the projects.

"Developers will have the right to sell power to any other distribution companies or to any high-tension consumers in the event of default," ministry sources told Business Standard.

The decisions were taken at a meeting between Union Power Secretary RV Shahi and the principal secretaries (power) of various states.

The final distribution chart will be prepared after the government of Chhattisgarh conveys its acceptance and support for development of the ultra mega power project and the escrow capability and reform measures have been sorted out.

"There has been slow progress in the case of Akaltara ultra mega power project in Chhattisgarh," officials added.

Under the payment security mechanism, there will be no state or central government guarantee and the payment security mechanism will consist of an irrevocable letter of credit and irrevocable arrangement of escrow account having claims on receivables for which a decision will be taken at the time of the power purchase agreement.

Maharashtra has received the maximum allocation of 3,800 Mw. While Rajasthan and Gujarat have been allocated 1,600 Mw of power each, Delhi, Uttar Pradesh, Uttaranchal, Punjab, Haryana, Madhya Pradesh, Chhattisgarh, Karnataka, Tamil Nadu and Kerala have been allocated 500 Mw, 800 Mw, 100 Mw, 1,100 Mw, 850 Mw, 1,700 Mw, 750 Mw, 2,000 Mw, 1,000 Mw and 200 Mw, respectively.

The highest requisition for power from the ultra mega power projects came from Maharashtra, of 5,500 Mw, while the lowest requisition of 200 Mw each was made by Uttaranchal and Kerala.

"The allocation of power from the ultra mega power projects should be only for own consumption of the states and no trading of power will be allowed," the officials said.

"Due to a few states being prompt in responding to the ultra mega power project initiative, the projects at Mundra Port in Gujarat and Sasan in Madhya Pradesh are quite ahead of the others," the officials added.